Foreign-owned gas companies have legally avoided paying significant tax on billions in earnings from their Australian operations because of loopholes, according to a study.
The loopholes have allowed the companies to write off interest payments for the borrowings of offshore subsidiaries, it has been claimed.
The federal government is going to make sure energy giants pay their share of tax with Treasurer Scott Morrison announcing a Parliamentary inquiry. (Vision courtesy ABC News 24)
The study, by academic accountants at the University of Technology School of Accounting, and left-leaning campaign group GetUp, looked at the available balance sheet data of gas giants ExxonMobil and Chevron. It found the two companies have achieved colossal revenue flows from their Australian operations but paid little if anything in petroleum resource rent tax in recent years.
The practice is known as “debt loading” or “thin capitalisation”.
Over the two years 2013-14 and 2014-15, Chevron earned more than $6.12 billion in revenue, but paid nothing in PRRT, according to the assessment.
It found ExxonMobil achieved revenue of almost three times that at $18.08 billion in the same period, but paid only $803.5 million.
The report, Investigation into the Petroleum Resource Rent Tax and Debt Loading in Australia – 2012 to 2016, found 95 per cent of oil and gas projects in Australia paid nothing in PRRT in 2014-15.
The case for reform has been boosted by a recent Federal Court ruling that went against Chevron Australia in a $340 million dispute with the Australian Tax Office for financial arrangements between 2004 and 2008. The full bench concluded the Australian arm had paid more in interest payments to its US parent company than would otherwise be necessary, thus reducing its taxable profits.
However, the company noted it had paid close to $4 billion in taxes and royalties since that period.
GetUp’s Natalie O’Brien said the interest payments on borrowings were designed to minimise or eliminate tax liabilities, that could otherwise fund schools and hospitals.
“Between 2013-2015, Chevron made over $6 billion in revenue in Australia. It paid zero dollars in PRRT, and they paid zero dollars in income tax,” she said. “That’s a rort.
“In the same period, ExxonMobil made $18 billion in revenue and paid no income tax.
“Australians are sick and tired of big corporations using their influence to increase their own power and profits, at the expense of the community and our environment.
“Every day people are being forced to deal with cuts to essential services – all because our politicians won’t stand up to these greedy gas giants.”
The government has commissioned independent expert Michael Callaghan, AM, to review the operation of the petroleum resource rent tax to assess its effectiveness at securing a suitable return for Australians from the development and sale of their mineral resources.
The PRRT was introduced in 1988 under the then Hawke Labor government, and was designed to tax profits at 40 per cent.
It differs in this crucial respect from state royalties, which tax according to volume and thus do not differentiate between highly profitable ventures and those that might be marginal or even loss-making.
However, profitable income under the PRRT is calculated after the deduction of eligible expenses and where these expenses exceed revenue in a given year, such losses can be carried forward to the next year for deduction. This means high capital start-up costs, can be amortised over years, rendering apparently lucrative projects free of PRRT liabilities.
“The good news is that we can fix this,” Ms O’Brien said. “We can close the loopholes, and recover enough to restore every last cent of Coalition cuts to local hospitals and fully fund Gonski needs-based school funding reform – twice over.”
“Debt loading refers to a tax avoidance strategy where business operations and investments are funded with excessive debt rather than equity,” the UTS report authors note.
“Excessive use of debt compared to equity creates ‘debt loaded’ or ‘thinly capitalised’ structures. Debt loading is often used by subsidiaries of multinational entities to shift profits from high to low tax jurisdictions.”
The eighth annual rental affordability snapshot released by Anglicare on Wednesday reveals that, for those on welfare payments and the minimum wage, rental affordability remains at crisis point. While much of the talk in the run-up to the budget has been about the affordability of buying a house, the snapshot is a strong reminder of the inadequacy of welfare payments such as Newstart and the desperation many low-income families face just trying to find a roof to live under.
On Tuesday the latest consumer price figures showed that while inflation growth jumped a little bit to 2.1%, rental price growth at 0.6% remains the lowest it has been for more than 20 years.
This slowing of rental price growth is the main driver behind the findings of the latest Anglicare rental affordability snapshot, which show that rental affordability for couples on the minimum wage has improved ever so slightly over the past year.
Since the middle of 2014 rental prices across Australia have on average been rising slower than the minimum wage and, since the end of 2015, they have been rising slower than overall inflation:
But while this does help low-income families, it has done little to undo the massive rent price increases of 2007 to 2012.
Over the past decade, while the minimum wage has risen 31%, and inflation has gone up 27%, rents have soared 48%. It is much less affordable to rent now than it was a decade ago:
But one problem with looking at rental prices across the nation is that rents – perhaps even more so than house prices – are greatly affected by local conditions.
The best example is the difference between Sydney and Perth over the past 15 years. During the boom periods, Perth and Sydney both saw rents zoom upwards but the prices in Perth were much greater.
But the end of the mining boom has seen rent prices in Perth collapse over the past two years. In the past 12 months, while the price of rents in Sydney rose by a still historically low rate of just 2.5%, in Perth rents on average have fallen 7.3%. So drastically have rents fallen in Perth that they are back at the level paid in December 2011, whereas in Sydney they are now 17% higher than then:
The other issue for rental affordability is availability.
The snapshot assumes that a family with two children would require a three-bedroom property and that “share accommodation” is also not suitable for couples or families except for couples on an aged pension.
The report also assumes that, for a property to be affordable, the rent should be less than 30% of household income.
Across the nation, Anglicare found that of the 67,651 dwellings that were available for rent on the weekend of 1-2 April, only 6% were are suitable for households on government benefits. This was slightly down on the 7% in 2016. The story is better for households on the minimum wage (either singles or couples), with 30% suitable for any of those four types of households – but again slightly down from 31% in 2016. But these figures – as bad as they are – hide the crisis for many types of households.
For example, across Australia, there were just 21 dwellings that were affordable for a single person on Newstart and just 1.5% of dwellings were suitable and affordable for a single parent subsisting on the parenting payment. Even for a single person on minimum wage, just 1.6% of dwellings were affordable:
Across the capital cites, the picture of affordability improved most for couples on the minimum wage but has actually slightly worsened for single people on minimum wage.
The deteriorating situation for single people on minimum wage is driven mostly by the big fall in affordability in Melbourne, where there the snapshot notes there is a “dearth of appropriate and affordable rentals for most categories of low-income earners”:
But changes can also disguise the picture.
One reason for small changes in affordability for households dependent upon welfare is because no dwellings are available at all. The situation has not become worse only because it was already at rock bottom.
For example, out of 13,447 properties in the greater Sydney and Illawarra areas, not one was affordable for a person on Newstart, the parenting payment, youth allowance or disability support pension, and just 23 were affordable for a single person on the minimum wage:
That Can End Trump’s Presidency
Legendary journalist Dan Rather is asking the two vital questions whose answers have the capability of ending Donald Trump’s presidency.
Legendary journalist Dan Rather is asking the two vital questions whose answers have the capability of ending Donald Trump’s presidency.
Rather asked four vital questions on his Facebook page:
1. What did Mr. Trump know and when did he know it about Russian efforts to influence the U.S. Presidential election? The President and those around him are engaged in a furious fight to prevent the American people from knowing. What are they hiding? If, as they say, there’s nothing to hide, why are they working so hard to conceal what they know?
Republican led House and Senate investigations are–purposely or not– bogged down. While the FBI investigation (also led by a Republican) is said to be rigorous and far-reaching, who can say with certainty? We do know that the FBI was slow and unsteady at the start.
A truly independent, bi-partisan investigative special commission (with maybe a special prosecutor?) would seem to be a must, but so far there is no significant movement to establish one.
2. Given indications so far, the President appears to have plenty to hide in his tax returns. Again, if he has nothing to hide why is he fighting so hard to keep them secret? How much taxes he has paid (if any) is not the most important part of this. More important is finding out how much he owes–how much he is in debt to–other people, who they are and where they are (foreigners, foreign powers?)
3. What is the President’s strategy to deal with war and peace challenges such as North Korea, Russia in Eastern Europe, Iran, Syria and Afghanistan. One-off missile attacks and mega-bomb droppings are tactical moves, in and of themselves. If they fit into a large strategy in any or all of the major threat areas, what is that strategy?
4. What is happening behind the shadows with our immigration policy? For all the talk of how the President has struggled in his legislative agenda, the reporting coming out of the Department of Justice under Attorney General Jeff Sessions and multiple local communities suggests that there has been an active change in how the nation is dealing with this issue.
Coffs Harbour is set to receive an innovative new TAFE NSW SkillsPoints headquarters, as part of the NSW Government’s push to create the workforce of the future by collaborating with business and industry.
Member for Coffs Harbour Andrew Fraser today revealed the coastal town as the chosen location of one of six new regional and three metropolitan SkillsPoints headquarters, which have been designed to ensure TAFE NSW builds on its reputation as a world-class vocational education and training provider.
“SkillsPoints are intersection points where TAFE NSW will work with business and industry to develop curriculum and training to provide Australians with the skills needed for the jobs of the future,” Mr Fraser said.
“Our new SkillsPoints will focus on developing curriculum and training for the booming tourism industry, to cater for a high demand in hospitality staff, travel and accommodation workers and marketing and promotions professionals.”
The first SkillsPoints HQ – Innovative Manufacturing, Robotics and Science – will open in Newcastle in September.
The rollout of the remaining SkillsPoints HQs in Griffith, Tamworth, Queanbeyan, Dubbo, Coffs Harbour, Ultimo, Parramatta and Mount Druitt – will be announced in coming months.
Assistant Minister for Skills Adam Marshall said each SkillsPoints will be powered by a core team of between eight and 15 staff to meet the needs of local students and employers.
“What is so exciting about these SkillsPoints headquarters is that each location has been strategically determined to support its own region’s economic growth and employment needs. So, for example, the SkillsPoints in Coffs Harbour will focus on tourism while the SkillsPoints in Griffith will focus on agribusiness,” Mr Marshall said.
“With regionally based headquarters and a Statewide focus, SkillsPoints will be capable of rapidly designing and delivering training to meet the needs of established and emerging industries.
“Whether in a classroom, on-site, online or a combination of these, SkillsPoints training and resources will be tailored to industry needs and demonstrates the NSW Government’s commitment to ensuring the same high-quality, industry relevant content anywhere from the city to rural and regional NSW.”
26 April 2017
The Coalition has recorded a marginal improvement in the latest Newspoll but Labor remains comfortably in front, despite a big government push on migration and citizenship reform.
The poll, published by the Australian on Sunday night, has Labor ahead 52% to 48% on the two-party-preferred measure, compared with 53% to 47% three weeks ago.
The movement is within the poll’s margin of error. The latest Guardian Essential poll had Labor leading the Coalition 54% to 46% a week ago.
Last week the Turnbull government announced changes to the 457 visa program and outlined a new process for obtaining citizenship – populist measures it hopes will resonate with disaffected voters drifting to political insurgents such as One Nation.
But the government’s big political push, launched while Newspoll was in the field, was disrupted by continued displays of disunity.
After being advised by some colleagues to quit politics for the good of the government, the former prime minister Tony Abbott last week declared he would continue to make public interventions as he saw fit.
Abbott’s statement of defiance was followed by a leak of polling from the last federal election which showed the former prime minister was under pressure in his Sydney seat of Warringah. Abbot responded furiously to the leak.
Late last week the finance minister, Mathias Cormann, warned Abbott to pull his head in, saying his interventions were smoothing the Labor leader Bill Shorten’s path to the Lodge.
On Sunday the leading conservative Peter Dutton took a softer line on Abbott, saying the Liberal party needed to respect its former leaders, but he also chided the former prime minister about keeping his public interventions constructive.
Last week the government attempted to ratchet up political pressure on Labor to endorse the changes to citizenship and the migration program, and spent the week talking about “Australian values”, but Shorten focused instead on housing affordability.
The latest Newspoll suggests the government’s primary vote is steady on 36% and Labor’s primary vote dropped one point from 36 to 35%. One Nation’s primary vote was steady on 10%.
Malcolm Turnbull’s net satisfaction rating improved from minus 29 points to minus 25 points since the last Newspoll, and Shorten’s rating also improved, from minus 22 to minus 20 points.
It’s Holy Week, the most sacred time in the Catholic liturgical calendar. Between Thursday and Saturday, Catholic liturgies will recount the last days of Jesus of Nazareth, including his last supper with his followers, his condemnation to death, his crucifixion and his burial.
There would have been a time in which I would have attended church every day of this week. Holy Week marks the key message of the Catholic Christian faith: that Jesus suffered, died, was buried and on the third day he rose again, breaking the bonds of death and redeeming humanity.
In short, Jesus’ death and resurrection saves us from our sins.
Don’t get me wrong. I’m no saint. I make no claim to sinlessness. I could use some of that forgiveness and redemption. But it is hard to take seriously a church that, in its very organisation, seems so sinful.
I know the church hierarchy is made up of human beings, and human beings are not perfect. But these particular human beings make special claims to holiness and grace, and yet they spawn and support an institution that grotesquely violates children.
Jesus said that children are special, that they are holy. The royal commission into institutional responses to child sexual abuse says that there have been nearly 4,500 reported cases of alleged abuse of children in Catholic institutions over the past 35 years. No doubt many more remain unreported.
I know because my fellow Catholics talk to me about these issues. I know because I can look around Catholic parishes and see the declining attendance.
Even enrolments in Catholic schools are falling in Australia. Catholic education officials say they can’t build facilities fast enough to meet demand, so parents are choosing other government schools. It’s an odd logic that argues numbers are falling below capacity because demand is too high.
For what it is worth, I later moved my kids back to the Catholic education system when they reached high school. I wanted them to be grounded in Catholic principles of social justice and to know what it is to live Christian faith within a community of believers. For many Catholic families, Catholic school for their children is their one tangible link left to the Catholic faith.
There is a lot of chatter among practicing Catholics in Australia about what to do about the evidence given at the royal commission. Francis Sullivan, chief executive of the Catholic church’s Truth, Justice and Healing Council, gave a talk recently:
There is now a deep malaise compounded by a simmering anger within the community about the Church and child sexual abuse … The very fact that the church was on trial rips at the heart of what the church is meant to be. And that speaks to me of a profound loss of direction, integrity, purpose and meaning at the heart of the church. A spiritual wasteland. It is my sense that so many Catholics share that shock. People say the Church now needs to get its house back in order but I say we have to re-build the house.
Sullivan’s address is excellent. It deserves a wide reading. He made five recommendations to how to rebuild the church. Each recommendation is good on its merits, but the reality is that these actions cannot be brought about by the people in the pews. As long as the church in its organisational structure excludes women, parents, married people, and men like Francis Sullivan from true leadership and decision-making, nothing is likely to change.
It pains me to say these things. I mourn the loss of being part of a parish community in which I can celebrate my faith and receive the sacraments. And I know there are good priests in the church, men who feel dismayed and betrayed too. But even more so I grieve for the thousands of children in Australia who have been irreparably harmed, whose lives have been destroyed and whose faith and trust has been so comprehensively violated. I can’t, in good conscience, continue to prop up a church that has been so exposed in its systemic wrong-doing, and yet is still doing so little to make reparations.
So this Holy Week I will look forward to Easter and the redemption it brings. And I will pray that redemption comes, and soon, to the Holy Roman Catholic Church.
Member for Coffs Harbour, Andrew Fraser, is encouraging regional coastal councils to apply for NSW Government funding for essential dredging projects under the Rescuing Our Waterways program.
Mr Fraser said the State Government recently announced an additional $6 million over four years for the Rescuing Our Waterways program, as part of the NSW Coastal Dredging Strategy.
“This funding will help improve the accessibility, health and safety of our regional waterways for recreational and commercial vessels,” Mr Fraser said.
“Rescuing Our Waterways is delivered in partnership between State Government and councils.
“The program has already benefitted a number of communities along the coast, improving access to local waterways.
“I encourage local councils to find out more about this fantastic initiative to ensure our community continues to enjoy our coastal harbours and rivers,” Mr Fraser added.
Councils can apply for up to 50 per cent of the cost of a project.
Applications for the Rescuing Our Waterways program are now open and close 23 June 2017.
The top police officer on Manus Island has flatly rejected the Australian immigration minister’s claim that a shooting last Friday was sparked by detainees taking a five-year-old boy into the detention centre.
The regional police commander, David Yapu, told Guardian Australia Peter Dutton’s comments were completely wrong, and maintained that the shooting began when an altercation between navy personnel and asylum seekers escalated.
“It’s a total separate incident altogether,” he said. “The incident that transpired on Friday was because a duty soldier was being assaulted by one of the asylum seekers or refugees.”
Yapu said a young boy had gone to the centre to ask for food about two weeks ago, but he was not led there and was 10, not five. The boy’s parents had not made a complaint, and police were not investigating any link between his visit and the shooting.
But on Thursday, Dutton alleged the shooting occurred after local people witnessed asylum seekers leading a five-year-old boy towards the centre.
“I think there was concern about why the boy was being led, or for what purpose he was being led, away back into the regional processing centre,” he told Sky News.
“I think it’s fair to say that the mood had elevated quite quickly. I think some of the local residents were quite angry about this particular incident and another alleged sexual assault,” he said, while conceding he did not have “full details”.
The comments formed Dutton’s only public statement on the shooting since it happened a week ago.
Dutton’s account, which mirrored a witness’s statement to News Corp last week, was wrong, Yapu said.
On social media detainees also disputed Dutton’s statement, saying the allegation related to an incident two weeks ago when a young boy asked for some food and detainees told him to stay at the doorway while they gathered some up. Benham Satah said several CCTV cameras would have captured the visit and called for Dutton to release the footage.
“Security came to them later that night and asked what [the] child was doing and they explained and security left,” he said.
The Greens senator Nick McKim told Guardian Australia Dutton had been caught telling an “outrageous lie” and should either “resign or be sacked”.
“This is on top of consistent failures to protect vulnerable people to whom he owes a duty of care,” McKim said.
“If he won’t go the PM ought to sack him. This has disturbing echoes of the children overboard lies.”
There have been long-running tensions between the military and police in Papua New Guinea, and in the Manus community hostility towards the asylum seekers and refugees has also reportedly grown, particularly since those detained inside the naval base were given the ability to travel into nearby Lorengau township.
The Manus MP, Ron Knight, predicted at the time there might be violence. There have also been a number of alleged attacks by staff working at the detention centre, including the alleged drugging and gang rape of a PNG woman who worked at the centre by expatriate colleagues, including Australian citizens.
The Kurdish journalist and Manus detainee Behrouz Boochani told the Guardian on Thursday Dutton’s comments were dangerous and could further inflame community tensions.
The navy and police have launched an investigation into the shooting and pledged to bring perpetrators to justice.
Dutton’s office has been contacted for comment.